Gun Shops Face Nationwide Ammunition Supply Shortage

Gun shops nationwide are facing ammunition supply shortage as many people started buying firearms and ammunition during the presidential election last year when President Barack Obama discussed the implementation of a stricter gun control and after the tragic shooting Sandy Hook Elementary School in Newtown, Connecticut.

Mark Campbell, owner of Mid America Arms in St. Louis told CNN Money, “We can’t get any inventory within a 100-mile radius.”

Last January, Wal-Mart Stores, Inc. (NYSE:WMT) limited the sales of ammunition to 3 boxes for every customer per day due to increased demand, which was driven by the on-going debate regarding gun control. The retail giant implemented the limit per customer because of supply shortage.

According to Brian Rafn, research directors at Morgan Dempsey Capital Management, gun retailers like Cabelas Inc(NYSE:CAB)’s  sells two or three shrink-wrapped pallets of 5.56,, or .223 ammunition for AR-15 assault rifles in just a couple of hours. According to him, the shelves for the ammunition supplies are “cleaned off like locusts” once available. Rafn also said, “You’re talking about a massive civilian arsenal build up.”

He added that the prices of 50 rounds of ammunition for assault rifles per box increased from $12 to $25. Rafn also speculated that ammunition manufacturers are ramped up production to meet the increasing demand. He said, “They’re probably [working] three shifts, seven days a week plus overtime.”

According to ammunition manufacturers such Alliant Techsystems Inc. (NYSE:ATK), Olin Corporation (NYSE:OLN), Winchester, Hornady Manufacturing and Remington are “probably scrambling to build new plants they haven’t done in eons.”

The report from CNN cited that the answering machine from Hornady Manufacturing has an outgoing message saying, “call volume, order volume and demand for product has increased dramatically.”

On the other hand, Caleb Ogilvie, a concealed-carry instructor working at Cabot Gun & Ammo in Cabot, Arkansas said that workers at Remington ammunition plant are working 24-7. According to him, it is hard to keep the supplies of ammunition on the shelves despite its proximity from the plant particularly the supply for .22 caliber due to its popularity and cheap price.  He said, “.22 ammo; you cannot find anywhere right now. It’s popular. It’s cheap. People want to go out and target shoot. People just want to go out and plink.”

Last year, data from the FBI showed that gun sales surged to record high on Black Friday as applications for background checks increased by 20 percent to 154,873 on November 23.

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